DSM report 2013: price pressure on vitamin E

The animal nutrition and health division of Royal DSM has seen a growth in volume last year. However, vitamin E was more expensive in 2013, compared to 2012. This is stated in the ‘2013 final results report’, released by the company today.

These results confirm the preliminary, unaudited results DSM published on 21 January 2014.

DSM has different divisions: Performance materials, polymer intermediates, food specialties, nutrition (including animal nutrition and health) and pharma. For the full year 2013, DSM delivered 18% higher EBITDA (earnings before interest, taxes, depreciation, and amortisation), while facing a challenging economic environment. For Q4 the company realised 30% higher EBITDA.

In the unit 'animal nutrition and health' net sales were €512 million in Q4. Organic sales growth in Q4 was 9% as volumes were up 12% compared to the weak Q4 2012 and 3% above Q3 2013. Price/mix had a negative effect of 3% compared to Q4 2012. A prolonged period of demand weakness earlier in the year has affected prices of several animal nutrition products negatively in 2013, most notably vitamin E. This demand weakness in combination with market speculation about possible increases in supply has increased price pressure on this vitamin.

In Q4 Tortuga delivered sales of €68 million and an EBITDA of €9 million. During its first year as part of DSM, the Tortuga business in Brazil fully delivered on expectations. The acquisition was concluded in April 2013 and the integration program is firmly on track. Tortuga provides high-quality nutritional supplements including minerals for pasture-raised cattle as well as for dairy cows and feedlots. The combination of the DSM and Tortuga portfolios supports DSM's strategy of becoming a global full solutions provider. It boosts its access to a ruminants market of around 35,000 Brazilian cattle farmers, and enables Tortuga's minerals to reach other geographies and segments worldwide.

In 2013, DSM opened two new premix plants, in Vietnam and the Philippines. It also took over two other premix businesses in China and the Philippines. In China, the construction of the new Animal Nutrition Innovation and Science Application Center close to Beijing is nearing completion and the inauguration is planned for 2014.